Monday, November 17, 2008

If You're In The Market, It Requires A Constant Eye (Or, Today We Were Down, Rallied Substantially To Up, Then Sold Off Hard To Close Down = 'Normal')

See the title. Another "normal" day - in other words, whipsaw volatility most likely caused/created by quant funds. Oh well. I really don't think there's any shame in admitting that this market is difficult, whether one's a trader, investor or whatever. Despite whether if you are bearish or bullish, the quickness of the huge moves we have had lately make it very hard to adjust buy positions and set stops. You may get lucky if your timing is right, but the whipsaws undermine most reasonable strategies. Regardless of your approach, you can't put a high percentage of capital to work in a market like this. But I think you can put some.

The market struggled to build on the morning bounce, then sold off to close near the lows. Kass on realmoney seems to be calling for a substantial rally into year end; I tend to agree with him. I am cautiously optimistic that we are going to have some seasonality kick in fairly soon. How knows how long it will last, but it should be tradeable, especially if this volatility calms down. There is still is no rush to build positions, but at least re-reading one's buy list seems like a good idea to me right here. I am looking forward to buying DRYS tomorrow, below 9.25, at what I think will look like an absolute steal 6 months from now.